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Executive Summary
This study sought to understand remittance flows into Syria, and established that various Informal Value Transfer
Systems (IVTS) are used, to the exclusion of the formal banking sector. Registered and unregistered hawala, courier
services and family connections are used. Remittances have played an increasingly important role in Syrians’ household
income in the last ten years, although the data available is likely significantly to under-estimate the real volume.
In government-controlled areas there are both registered and regulated hawala transfer companies and unregistered
hawala agents operating outside of the regulatory structures. Registered hawala are not generally operating outside
government-controlled areas – they either close in those areas or lose their Damascus-issued license.
Customer usage patterns vary primarily according to the services conveniently and safely available in the various areas of
control, but all services used are reported to provide a reliable, affordable and accessible service, given the context.
Considerable safety risks are reported when customers have to cross checkpoints to access the services, and travel
generally is a major concern for people.
In areas of government control, registered hawalas are being effectively used for Cash Transfer Programming (CTP),
however the regulatory environment means that confidentiality requirements have to be carefully considered.
In the large parts of Syria outside of government control, where major humanitarian needs persist, unregistered hawalas
are being used to cover pay NGOs’ operational costs and pay their suppliers, and represent the only potentially (and
partially) scalable cash-out facility.
The complexity of, and therefore the full range of risks and opportunities associated with, the hawala system remains only
partly understood by many INGOs at an organisational level, although considerable familiarity may exist among key
members of national staff and local partner NGOs.
Agencies exploring options for cash-based programming in areas outside government control need to develop extended
agent assessment, due diligence and monitoring routines to mitigate against the considerable risks of using an
unregulated financial service in a conflict environment.
The required guidance and systems can be created more quickly and effectively if there is the will to collaborate between
agencies, and donors will need to play a key guiding role in this process.
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Table of contents
Executive Summary ................................................................................................................................................................ 2
Table of contents .................................................................................................................................................................... 3
Acknowledgements ................................................................................................................................................................. 4
Introduction and terminology .................................................................................................................................................. 4
Context .................................................................................................................................................................................... 5
Objectives ............................................................................................................................................................................... 6
Design ..................................................................................................................................................................................... 6
Secondary Data Review ......................................................................................................................................................... 7
Key Informant Interviews ...................................................................................................................................................... 11
Sender Study - Face-to-face Surveying in Irbid .................................................................................................................... 13
Sender Study - Focus Group Discussions in Zaatari Camp ................................................................................................. 15
Sender Study – Online Survey ............................................................................................................................................. 15
Receiver Study – Face-to-face in southern Syria ................................................................................................................. 17
Receiver Study – Survey ...................................................................................................................................................... 23
Project Design Recommendations ....................................................................................................................................... 23
Annexes
Annex A – Surveymonkey questionnaire
Annex B – Questionnaire used in Jordan
Annex C – Questionnaire used in Syria
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Acknowledgements
This study was carried out with guidance from NRC’s Access Adviser and Cash and Voucher Adviser. NRC staff in
Jordan undertook on-the-ground data collection in Irbid Governorate, while The Big Dream Organisation and Tamkine
Consulting Group surveyed on NRC’s behalf in southern Syria.
It took place immediately prior to and overlapped with a study into Informal Value Transfer Systems (IVTS) in Syria by a
team from Beechwood International. NRC and Beechwood International recognised the value of harmonising and sharing
surveying structures and data, and their positive and open approach has been a great asset.
The REACH Initiative offered and carried out focus group discussions in Zaatari Camp in Jordan, and plan to deliver their
own remittances report based on their Area of Origin work in Syria in August.
Study design advice was provided at a round-table meeting by representatives of UNOCHA, USAID and ECHO, and
further contributions were made by UNICEF, REACH and Mercy Corps.
The study was carried out under NRC’s Access stream funding from NMFA and DfID, however the comments and
conclusions are those of the author and do not reflect any donor position.
Introduction and terminology
This study was designed to provide NRC programme staff with improved understanding of various cash transfer
modalities to inform the design of humanitarian projects in Syria. Remittances, payments from family members outside
Syria to support people inside Syria, were identified as a class of cash transfer with a likely high number of transactions to
be studied, and with relatively low data sensitivity compared to transfers to organisations and businesses.
In addition to formal transfer mechanisms (bank transfers), various IVTS are available including the use of couriers to
physically carry money to the recipient, transfers using family connections and social capital, and the hawala system.
Hawala is an IVTS, common in the Middle East and beyond, based on the performance and credibility of local money
brokers. It operates outside of, or in parallel to, formal financial channels.
The hawala system, like the formal banking system, does not require the physical movement of cash for a transaction to
take place. Where it is unique is that it does not involve a ‘promissory note’ of any sort. There is no written contract to
guarantee a payment, rather it is based on the bond of trust and agents’ need to maintain their position in the network.
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Hawala brokers, or hawaladars, may be registered
with their national governments, or they may not.
They range from registered multinational concerns
with franchises in dozens of countries (such as the
Dubai-based Somali group Dahabshiil) to sole
traders, sometimes offering hawala services on the
side of a travel agent or import/export business.
At its simplest, hawala works as follows: when a
migrant worker in Country A wishes to send money
to his relative in Country B, he contacts a local
hawala operator and gives him the amount he wants
to transfer. In return, the sender receives a code,
which he passes on to his relative via e-mail or
telephone. The hawala operator contacts a colleague
in Country B and requests him to disburse the
agreed amount to the beneficiary. The relative in
Country B can now receive the money (minus a small transaction fee to the operators) from the hawala operator in
Country B by showing the code. Now, the hawala operator in Country A is indebted to the one in Country B, since the
operator in Country A collected the money and the operator in Country B handed them out. The hawala operators will
have their own cash pools to collect/make payments, and keep track of how much they owe each other at any point of
time. The operator in Country B might be compensated by a hawala transfer going in the opposite direction. The majority
of flows, however, go from developed to developing countries. There are therefore numerous ways to settle the accounts,
for instance by under/over-invoicing other goods or simply by a regular bank transfer (El‐Qorchi, Maimbo, & Wilson,
2003).
The word hawala just means ‘transfer’ in Arabic, however local understanding of the term varies according to the balance
of formal and informal. In Jordan for example where there is a relatively well-regulated financial sector, hawala principally
means the registered money transfer companies with high-street shop fronts. In Afghanistan however the informal brokers
are much more prevalent and the meaning understood will be different.
In this document the word ‘hawala’ will be used when a point applies to both registered and unregistered agents,
otherwise the terms ‘registered hawala’ and ‘unregistered hawala’ will be used for clarity. For the surveys ‘money transfer
company’ was also used to denote a registered hawala, and ‘businessman network’ or ‘transfer between businessmen’
were used for unregistered hawala.
Context
As the conflict is into its fifth year, the humanitarian situation in Syria continues to deteriorate. The widespread destruction
of infrastructure and disruption to basic service delivery has a negative impact upon the lives of local populations.
Furthermore, recurrent and often multiple displacements add a layer of complexity to understanding and addressing the
needs of affected populations. Only very limited information is available on the specific needs and capacities of women,
girls, boys and men, and the potential negative effects and risks that each of these groups is exposed to as a result of the
crisis. Protective institutions, services and community structures range from being partially functioning to completely
destroyed and non-existent in some areas, as are financial institutions including banks and high-street money transfer
businesses – particularly outside government areas of control.
Mechanism of the hawala remittance system (Wang, 2010)
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Access to people in need of humanitarian assistance and protection remains one of the most serious challenges for
humanitarian actors. Providing programmes and partners with the requisite financial resources is challenging against the
backdrop of a war-ravaged country. Agencies are seeking to diversify their responses away from in-kind material support,
and it is hoped that cash-based remote programming may be able to increase access to humanitarian needs and allow
agencies to prepare for post-emergency programming.
Objectives
This study seeks to explore the potential of cash transfer programming as a key programmatic modality for humanitarian
actors to meet the needs of vulnerable populations inside Syria. NRC recognises the need for humanitarian actors to
increase their operational reach and diversify programme options to better meet emergency and post-emergency needs in
Syria. The opportunities for cash transfers to enable such projects in contexts is of paramount importance where access
is severely curtailed. This study outlines current stakeholder practice in sending money (in this case remittances) into
Syria.
It is not within the scope of this study to look at peoples’ needs, assistance preferences, spending patterns or suitability
for assistance under any potential project. Such information will be highly specific to the type of project under
consideration and also very time-sensitive, so further project-based assessments would have to consider this separately.
For this reason, and for reasons of privacy and protection, no personally identifying information was to be collected at any
stage of the study.
The study seeks to establish –
• What institutions, companies and mechanisms are being used to transfer remittances into Syria, with data at a
sub-district level for the receivers
• How reliable they are, in terms of successful delivery and consistency of operations
• What their pricing, delivery and documentation structures are
• What access issues there may be for various demographic sub-groups
• Which cash transfer modality may be suited to resourcing differing programmatic options
Design
Due to the range of people able to contribute knowledge to the study (including the Syrian community1 globally, and the
significant concentrations of Syrian refugees in neighbouring countries, who are likely to be sending remittances) and
NRC’s lack of access to a representative sample of receivers insider Syria, a range of traditional and remote data
collection methodologies was required.
1 Syrians living outside Syria prefer the word ‘community’ rather than ‘diaspora’, as the latter is used by them to refer to
the Israeli diaspora specifically
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Triangulation of data sources is a key principle for remote programming generally, and is especially important to this study
as confidence in the reliability and completeness of some of the data is necessarily limited. Where there are substantial
differences in answers given between the sources this is noted in the text.
Secondary Data Review
Academic and policy sources
The value of remittances to developing
countries is undisputed, providing the
second largest source of foreign capital
(after foreign direct investment), and
with an overall global value doubling in 7
years to nearly $500 billion by 2012.
Figures for Syria doubled in 4 years
from $800 million in 2006 to $1.6 billion
(2.4% of GDP) in 2010 (The World
Bank, 2015). 93% of remittances to
Syria come from the MENA region (The
World Bank, 2015).
The academic and policy literature surrounding
remittances systems, especially since 2001,
focuses mostly on IVTS in general and hawala in
particular. Although it is beyond the scope of this
report to reassess the place for IVTS in the
international financial system, there follows a brief
digest of a selection of key texts:
Writing in 1999 (and acknowledging the very limited
information available at the time), the influential
Nikos Passas defined IVTS as “any system or
network of people facilitating, on a full-time or part-
time basis, the transfer of value domestically and
internationally outside the conventional, regulated
financial institutional systems” (Passas, Informal
Value Transfer Systems and Criminal
Organizations, 1999). He places the emergence of
hawala several centuries ago in Arabia or India not
as a response to a need to avoid regulations but
rather to allow settling of debts and maintain the
safety of assets from robbers. Passas notes that the
transfer of funds may not be the sole or even main business of hawaladars, but is often “a tangential activity … done to
provide fuller services to the customers who need it”.
Remittances to Syria in US$. Source: World Bank, 2015
Sources of remittances to Syria. Source: World Bank 2015
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The central element of trust is addressed. Payments are guaranteed based on trust between the sending and receiving
hawaladars, and any intermediaries. “Violation of this trust brings about shame, ostracism and dishonor within the family
and the wider community (it also brings about economic ruin as a secondary effect)” (Passas, Informal Value Transfer
Systems and Criminal Organizations, 1999). In cases where a client group is particularly low status, however, there have
been recorded cases (such as that of Filipino immigrant workers in Dubai) of supposed IVTS agents absconding with the
funds. Passas contrasts the role of trust with the role violence plays in certain other informal financial systems, stating that
the violence which is observed is usually attributable to the business of the IVTS customers (e.g. narcotics) rather than
the service they are using.
Passas lists the reasons given for continuing to use IVTS even when alternatives are available –
• Lack of confidence in the conventional banks
• Lack of access to the conventional banking system
• Local bank does not have the means to send the money overseas
• Inefficient, costly, bureaucratic, unfriendly banking system
• Lack of legitimacy of the tax system
• Real or perceived need to bypass government regulations (perception of over-regulation or costly compliance)
• Cultural reasons - following tradition
• Lower costs
• Faster service
• In order to avoid reporting and ensure secrecy
• In order to protect assets from nationalization
• In order to make payments to intelligence operatives overseas (as in the case of Vietnam; Cassidy, 1994).
• In order to bypass currency controls
• Criminal purposes
Writing for the US DoJ in 2005, Passas lists hawala as just one of 16 modes of IVTS (the others included specifically
east-Asian networks, courier services, internet vouchers and even bank guarantees) (Passas, Informal Value Transfer
Systems, Terrorism and Money Laundering, 2005). He draws a distinction however between modalities for transferring
funds, the users of which he believes to be overwhelmingly legitimate, and those which transfer value (such as in-kind
transfers, gift cards etc.) which are almost always criminal. The latter, he says, tend to involve seemingly legitimate
payments, a very limited number of people in the system, and larger amounts of value than are usual with funds transfers.
Shima Keene (Keene, 2007) focused on debunking what she says are four ‘myths’ around hawala:
• That there is no paper for an audit trail. Keene says that, despite lack of regulatory enforcement, hawaladars keep
good paper or computerised records consistent with the need to operate on trust. The remaining issue seems to
be more about standardised access to these records by enforcement agencies.
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• Hawala is unique in that cash is not physically transferred. Keene points out that this is also the case with global
banking systems. The difference is that with hawala a formal transaction to balance the books may or may not
take place, depending on need.
• That money never enters the formal banking system. Referencing Passas, Keene explains that formal bank
accounts are often used to rebalance accounts between hawaladars.
• That Know Your Customer (KYC) rules do not apply. While such rules are not enforced, the role of trust (and
therefore the relationship) complements the formal recording of customers’ personal information to give a system
that, Keene argues, allows greater knowledge of the customer than formal banking requires.
Acknowledging the concern that terrorists use hawala to launder money, Keene draws a line between terrorism and
organised crime:
Nonetheless, even if money laundering itself is not the issue, receiving hawaladars still need liquidity to cover any gap
between funds paid out and funds received, and the arrangements made to provide this may not be accessible for outside
scrutiny.
Johan Rusten Wang (Wang, 2010) considered the varied experiences of European regulators and concluded that some
countries (notably the UK) have had considerably more success than others in bringing IVTS agents under formal
financial regulation. He ascribes this to successes of outreach and lowering the bar for inclusion, however he notes that a
‘medium’ proportion of transactions from the UK still go unrecorded by the authorities.
Humanitarian sources
Although NGOs, and especially local NGOs, engaged in the Syria response are believed to have been making use of
formal and informal money transfer systems, very little documentation is available. This is probably because such
systems have been used for operational rather than Cash Transfer Programming needs, and agencies’ operational
modalities are much less reported than project modalities and achievements. There is also considerable instinctive
caution about sharing information on activities in Syria.
Apparently unique in its publication of informative documents on the internet, UNRWA evaluated its Syria Cash
Assistance Programme through which Palestinian refugees in government-controlled parts of Syria have been receiving
cash assistance (UNRWA Evaluation Division, 2014).
UNRWA distributed cash to households in four ways: through their own facilities and offices, through Al-Baraka and BBSF
banks’ counter service and ATM cards, and through a network of registered money transfer outlets called Al-Haram. The
evaluators found that –
• Cash is preferred to vouchers and in-kind deliveries
• Al-Haram was the cheapest modality at $1.61 per transaction, compared to $1.73 for bank ATM cards, $2.16 at
BBSF, $2.98 at Al-Baraka, and $3.20 and $6.67 at the UNRWA facilities
“It is generally accepted within the counter-terrorism community that terrorists do not on the whole launder money. In fact, the process has been
described as being the reverse of money laundering. Money laundering is a process by which the proceeds of crime are processed through legal
channels in order to conceal their criminal origins. In other words, it is about making dirty money clean, hence the term “laundering”. Terrorists, on the
other hand, are in the business of taking clean money and making it dirty (Keene, 2007).
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• All three systems were effective, with 97.7% delivery in Damascus (lower and unspecified in other areas)
• The cash is perceived by the recipients to be useful and is generally used well
• ATMs are reported as being the recipients’ preferred mechanism
• Better assessment of outlets’ daily capacity is required
• Cash distributions should continue at Al-Haram and at the banks, but cease at UNRWA offices
• In cases of non-collection, geographical analysis must take place to look for patterns
• The single biggest impediment to smooth distribution is a disorganised beneficiary database
• There was scope for improvements in the soft components: market monitoring, outreach etc.
The evaluators reported that cash assistance in general is an appropriate assistance modality for their caseload, as food,
shelter and health needs could be met in the marketplace. However some caution was expressed for large-scale cash
distributions in Dar’a city where there had not been sufficient food in the market at the time, and where the Al-Haram
facilities were unprepared for the volume of transactions required of them.
NRC and some other NGOs in Iraq report using registered hawalas for Cash Transfer Programming (CTP), but none in
remote programming contexts. Any use by NGOs of unregistered hawalas there is kept low profile.
Beechwood International’s study finds that several organisations report using registered hawala to cover operational costs
and to reimburse vendors for vouchers redeemed (primarily from Turkey to northern Syria). There is a limited amount of
CTP delivering to beneficiaries, and that is not projected to grow substantially in the remainder of 2015 (Beechwood
International, 2015).
Jordan has a relatively stable, advanced and diverse financial sector, regulated by robust institutions. Registered hawalas
operate under the 1992 Money Exchange Business Law, and are also subject to the 2007 Anti-Money Laundering law
and the 2006 Terrorism Prevention Law. No person shall carry on money exchange business in the kingdom except by a
license issued by the board of Directors of the Central Bank of Jordan in accordance with the provisions of the MEB law.
Use of hawala by NGOs in Syria: (Beechwood International, 2015)
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The AML law cites a list of prohibited activities, and convictions have been made. Registered hawala are required by law
to keep a list of transactions, including details of senders and receivers, and to submit this to the Anti-Money Laundering
Unit for review.
In Turkey, payment service providers are regulated under Law No. 6493 and augmented by addditional anti-money
laundering and anti-terror financing instruments. Enforcement gaps remain, as they do with related precious metals and
other smuggling issues. Only banks, Western Union and Moneygram are licensed for international transfers. Nonetheless
large numbers of unregistered hawaladars operate across the country and handle substantial flows into Syria.
Money exchange offices in Lebanon are required to be registered and keep information on transactions and personal
information for five years. Iraq’s regulatory framework is similarly extensive but implementation remains limited
(Beechwood International, 2015).
Key Informant Interviews
A selection of registered hawala transfer companies were interviewed in Jordan: Abu Sheikha Exchange; Alawneh
Exchange, Musharbash Exchange, Swiss Exchange and Al Karak Exchange. All confirmed working with AlHaram
Exchange as the delivery partner in Syria, although some expressed willingness to work with informal hawalas as well.
Most said they have fixed fees averaging around $4 per transaction, all said a valid ID was required to receive money.
Alawneh and Swiss said they could provide proof of receipt paperwork (Alawneh at an additional cost).
The AlHaram Exchange website (AlHaram Exchange, 2015) lists 48 operational and 4 ‘paused’ offices (three in Idleb and
one in Aleppo). Overlay on an areas of control map (Strategic Needs Analysis Project (SNAP), 2015) shows them to be
exclusively in Syrian Government and YPG Kurdish-controlled areas (although telephone checks indicated that only the
Al-Malikiyyeh branch is actually operational in YPG areas). This tallies with information on community websites for Raqqa
and Deir-ez-Zor which stated that AlHaram offices in those location had closed, and that informal transfers are now being
used. Since the AlHaram site was consulted it is fair to assume that the Palmyra and Sokhneh branches have also closed
as the government lost control of those areas to IS.
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In a telephone interview
with AlHaram staff it was
explained that there are
two legally distinct
companies with different
roles in the process,
owned by the same
family. AlHaram Transfer
has the network of
branches and does the
customer-facing
transactions. AlHaram
Exchange does not have
a branch network in Syria
but makes the
connections between
AlHaram Transfer and
overseas financial entities.
It is also the Western
Union franchise holder
and has offices in several
other countries in the
region. Money transfer
companies in Jordan and
elsewhere have their
relationship with AlHaram
Exchange which then
passes the transactions
on to AlHaram Transfer to
make the payments.
In conversations with key informants from the refugee community living in Irbid it was reported that in many Dar’a villages
under opposition control, the administering committees (referred to as the National Coalition of Syrian Revolution and
Opposition Forces) act as a hawala delivery address for funds remitted, which are then distributed as the senders instruct.
This may provide a level of anonymity as the receiver information is not known by either the sending or the receiving
hawaladars. It is not known if there is a fee for this service.
It was also reported by refugees, and corroborated by sources in the humanitarian community, that in several places
where the government has relinquished control of an area, they have first confiscated peoples’ ID cards. This will hamper
collection of remittances from any money transfer facility that requires such ID – typically the case with registered hawala
and variably required for unregistered hawala.
AlHaram offices operational in government and Kurdish-controlled areas only. Pink shading = SAF,
green = Opposition, blue = IS, yellow = YPG, purple = JAN. Red dots denote contested locations and
not related to AlHaram. Shading is approximate, dated March 2015
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Sender Study - Face-to-face Surveying in Irbid
NRC Jordan’s team in Irbid was in a position to support the study
by adding a small number of questions related to money
transfers to their general monitoring and support routines. NRC’s
client group in Irbid may not seem likely to be able to send
money, but a useful 28 positive responses were gathered
between April 23rd and May 13th 2015. In order that respondents
be reassured that their answers would not affect the assistance
they receive, the ‘do you send money’ question was rephrased
as ‘do you know how to send money’.
28 responses is obviously insufficient for quantitative analysis.
However 28 testimonies are still valuable as informant
interviews, giving solid evidence that certain means of money
transfer are functioning and in use, and giving key information of
the terms and conditions that may be involved.
Reflecting the areas of origin of refugees living in Irbid, 89% of
responses related to money transfers to Dar’a Governorate.
Nobody reported using a bank. Just over one third used formal money transfer companies, the same proportion used
informal hawalas, 21% had family connections and a few had couriers delivering money on their behalf. 85% of deposits
were made in cash, with 2 respondents claiming they could make bank transfers.
The reliability of the services used was reported very positively, with 75% of respondents saying the money always or
almost always arrived correctly. The reports of the service being unavailable during the last six months were also low.
The most frequently-reported information required about the recipient in order to transfer money was their name, national
ID and then telephone number. The ID number was more frequently required by formal money transfer companies than
by informal systems, which tended to require only the name and phone number of the beneficiary.
Modalities cited by refugees living in Irbid
Transfer reliability, cited by refugees resident in Irbid Operational reliability, cited by refugees resident in Irbid
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As expected, formal transfer companies tended to require collection
of money from their offices, while the collection points for informal
mechanisms were more varied – one third of deliveries were to
peoples’ homes and in other cases another location was used.
People generally reported that there are no minimum and maximum
values for transfers and, when there were, they did not form a
pattern. The fees charged averaged at 3JD ($4.5) or 3%. The sender
always pays, the receiver usually does not, and the average reported
delivery time was just under three days. This was not, as might have
been expected, due to couriers being much slower than the other
modalities – couriers averaged 3.5 days.
Refugees’ assessment of the national versus local availability of the
services seemed not to be correlated with the service type. However
they said that informal modalities are somewhat more widespread
than formal ones, which may be more confined to urban centres.
A broad range of service features were rated as
important, without a single dominant response for any of
the mechanisms. Speed of transfer was rated fairly
highly, followed by cost.
Formal service availability Informal service availability
National and local availability, all modalities
Valued characteristics of a money transfer service for refugees in
Irbid.
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Sender Study - Focus Group Discussions in Zaatari Camp
At NRC’s request REACH conducted two focus group discussions (respectively five and three participants) and two
interviews with unregistered hawaladars in Zaatari Camp in April (REACH, 2015).
Participants gave information relating to transfers to Dar’a, Damascus and Rural Damascus, identifying formal transfer
shops in Mafraq town, informal transfer agents in Zaatari Camp Market Street, and couriers (in this case returning
refugees) as the main channels available to them.
The registered shop cited, Alaouneh in Mafraq, was said to be able to transfer sums between $50 and $200 to similarly
registered companies in government-controlled Damascus and Sahnaya in Rural Damascus (El Sham and Al Khoadmous
companies). The service costs the sender 4%, with collectors in Rural Damascus paying an additional 2% on collection,
and takes up to 2 days. The sender is given a code number to communicate to the receiver, who must also provide their
ID on collection. Confirmation is by telephone.
Concerns were expressed that the formal transfer companies’ record-keeping might put senders and receivers at risk, and
some people said they use informal transfer systems for this reason. Apart from people with limited mobility, no particular
access barriers were identified.
A number of unregistered informal transfer shops were identified by respondents in Zaatari Market Street. They are run by
refugees with relatives or close friends operating similar shops in Syria, in these cases in Dar’a Governorate.
Senders bring Jordanian Dinars which are exchanged at a somewhat unfavourable rate. They then pay between 3% and
10%, depending on the amount to be transferred – this is usually equal to 2JD. Refugees reported being able to transfer
between $50 and $400 this way, although the shop owners said as little as $20 could be sent. Only the receiver’s name
and ID are required, and confirmation is by phone.
As the large majority of Zaatari’s population is from Dar’a, most of these informal connections channel to there. For
senders to other unserved areas, or areas to which access is particularly difficult at the time, the only modality available is
sending money with returning refugees. This is not preferred as it is seen as less secure than formal or informal transfer
services.
Sender Study – Online Survey
NRC set up a Surveymonkey survey to try to capture transfer
modality information both from senders across the world and from
receivers inside Syria. The survey was open from April 28th to May
16th.
34 useful responses were submitted by senders. As with the
sample from Irbid, these are useful as individual testimonies but
not sufficient for any quantitative analysis. That is to say, the
information might be used to infer which systems probably do work
and how they work, but not how much money they handle nor
which modalities do not work.
Figure 1 - Transfer originating countries
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All but 3 responses were from the region, with 44% coming
from Turkey and 29% from Jordan. Compared to the World
Bank’s data on bilateral remittance flows discussed earlier this
sample significantly over-represents the flow from these two
countries and under-represents those from Saudi Arabia and
Lebanon. The distribution of data points received from the
survey is therefore representative of NRC staff’s networking
abilities rather than volumes of remittances.
The destinations reported were dominated by Damascus and
Aleppo, with transfers to urban rather than rural areas
representing 82% of responses. However two thirds of all Syria’s
governorates were represented, even if by very few data points.
The three main informal channels and the formal money transfer
companies all featured once again, with the role played by
family connections and couriers more prominent than in the Irbid
sample.
Digging into the modality responses, and recalling caveats
about the low number of data points, the following
generalisations can cautiously be made:
People sending to government-controlled governorates
(Damascus, Homs, Hama) use the full range of modalities
except banks (formal transfer company 33%, informal hawala
27%, family connection 27%, courier 13%)
People sending to areas where IS is dominant or strong (Ar-
Raqqa, Deir-ez-Zor and Al-Hasakeh Governorates) reported
only use of couriers (40%) and family connections (60%).
Surprisingly, no use of informal hawala was mentioned, and this
is understood to be a weakness in the data. The only currently-
IS-controlled area where informal hawala was reported was
Aghtrin sub-district of Aleppo. It may be that informal hawala
senders to IS areas were more cautious about the using the
online survey than others.
Very little data was submitted for transfers to areas likely to have been controlled by opposition forces, YPG or JAN – the
4 data points from Aleppo and Idleb are all for informal modalities.
Information on transfers to urban Aleppo indicates that family connections and couriers are most-used – there is again no
mention of formal companies or informal hawalas. This last finding must be considered suspect, as it does not correlate
with key informant interviews which indicated informal hawalas operating in these areas.
Modality usage, all areas
Transfer destination governorates, all modalities
17
For all modalities cash is the overwhelming favourite for
deposits, with only 12.5% of respondents thinking a bank
transfer could be accepted. 54% of all responses said their
transfers were paid out in Syrian Pound, 35% reported
US$. The US$-paying modalities were the informal
hawalas, couriers and family connections in equal numbers
- formal transfer companies were not reported as providing
US$. Minimum transfer amounts of between $10 and $500
were cited, with the maximums ranging from $360 to
$2500. A few respondents said there were no restrictions.
Reported transfer fees ranged from $3 to $45 and from 1%
to 10% - the sender always pays, the receiver occasionally
pays as well.
Two thirds of responses stated that money was collected
from the company’s office, with most of the rest happening
at an agreed location elsewhere. Almost identical scores
were recorded for the most important features of a money
transfer service: speed, cost, privacy, personal knowledge
of the agent, and privacy and safety for the receiver. The reliability of operations in the last six months was also rated
fairly well, with informal hawalas and services in urban Damascus having performed somewhat better than the others.
Receiver Study – Face-to-face in southern Syria
Two organisations with access inside Syria,
The Big Dream Organisation and Tamkine
consultancy, carried out on NRC’s behalf a
total of 708 face-to-face interviews with
receivers of remittances in Dar’a (410
interviews), Damascus (118) and Rural
Damascus (180) governorates in May 2015.
The sampling method was snowball, whereby
surveyors were directed by respondents to
their acquaintances who had also received remittances. This is appropriate for hard-to-reach target groups.
Service availability, all modalities
18
Informal hawala transfers were the most used, followed by family connections and registered money transfer companies.
It is notable that in Damascus and Rural Damascus the reported use of formal transfer companies is much lower than in
Dar’a – this is a surprising finding and may indicate a shortcoming in the data.
Plotting the responses onto a map of Rural Damascus, with green shading representing opposition control, shows
informal hawalas and family connections being used, with family connections dominating to the south west of the city
where there were significant clashes ongoing prior to the survey, and also around Yarmuk Palestinian camp. Zooming in
on Damascus city gives greater clarity for parts of Rural Damascus adjacent to opposition-controlled villages (while the
Rural Damascus - type of service used Rural Damascus - perceived risk of travelling to service
location
19
green shading, derived from SNAP and OCHA maps, indicates that some responses came from opposition-controlled
villages, this is uncertain). Mapping peoples’ answer to the question “do you have to pass dangerous places to collect the
money?” shows greater concerns along the southern and eastern city limits and relatively little reported risk in the city
centre.
In Dar’a it is clear that significant numbers of people living within 30km of Dar’a city are accessing formal transfer offices.
Indications are that these no longer exist in opposition-controlled areas, and so people must be crossing checkpoints to
collect remittances in the Government-controlled northern half of the city. In parts of south east Dar’a, only family
connections seem to be used.
There is a substantial perception of risk during travel for people living in Dar’a city, in villages along the Government-
controlled corridor towards Damascus, but also in an area to the west. It could be that the last point is somehow related to
the high concentration of IDPs in the area.
Unsurprisingly perhaps, those in the east who receive their money through family connections do not perceive themselves
to be at risk during the collection process.
There is a strong correlation in Dar’a between the distance people travel, the time they take to travel, and their perception
of risk. The chart below shows that most people feel safe travelling to areas close to their home, but that beyond 6km or
1hr 20mins people feel very unsafe.
Damascus - type of service used Damascus - perceived risk of travelling to service
location
Dar'a - type of service used Dar’a - perceived risk of travelling to service location
20
It follows that humanitarian projects should always seek to deliver money to locations within this range, in Dar’a at least.
The link between distances and times also indicates that Dar’a people are used to calculating travelling times based on
walking speed.
The average reported journey was 4.9km and took 1hr 10mins. Among
the modalities, accessing formal money transfers and couriers required
50% more travelling than the others (6km versus approximately 4km).
There were few differences between the governorates except that,
surprisingly, distances and times to the formal money transfer offices
were lower in Dar’a than in Damascus and Rural Damascus.
The correlation between travelling time and risk does not exist clearly for
responses from Damascus and Rural Damascus, probably because a
large proportion of those responses were from within the city centre
where risks are perceived to be lower.
The reported time to receive remittances was within a couple of days,
with the exception, understandably, of money brought by courier. There
were no significant differences in the times reported between the
surveyed governorates.
Services used, all areas
21
The reported cost of transfers was very similar across the modalities, at around 5.5%. However when expressed in cash
terms there was wide variation between the unregistered hawalas averaging $11.20 and couriers charging an average of
$3.80. This might be interpreted to show that people are generally transferring larger sums with the unregistered hawalas
than with other modalities.
Remittance receivers generally report that they, in addition to the sender, are required to pay fees. This is most
pronounced in the case of unregistered hawala services.
All modalities were reported to be reliable and to have been operational relatively uninterrupted in the preceding six
months. Asked how often their transactions were received correctly, and how often the service had been operational,
unregistered hawalas scored around 50% more ‘almost always’ and ‘sometimes’ responses than average (and a
correspondingly lower number of ‘always’ responses) for both the questions.
US$ and % transfer costs
Who pays the transaction fees?
22
Various levels of access problems were reported for women, elderly people, minors (under the age of 16) and people with
disabilities.
The most frequent comments for all groups related to safety
of travel, transport difficulties, checkpoints and bombing.
Additional comments for women related to crowded offices
and the general unsuitability of this task for a woman.
Elderly people were reported to encounter medical issues
and general exhaustion when collecting money. Minors are
principally restricted by the lack of adult ID – this was even
reported by those who were describing transfers by family
connections and unregistered hawala. People with
disabilities, the perceived most access-challenged group,
had more frequent references to the common issues of
transport, safety and fear of bombing.
Service reliability, all areas Operational record, all areas
Reported access problems for women, elderly people, minors
and people with disabilities
23
Receiver Study – Survey
The section of the Surveymonkey survey for receivers of transfers inside Syria was very little used. In a number of entries
contradictory information was given for the governorate, district and sub-district fields. One can speculate that NRC’s
limited network and social media reach inside Syria will have been significant here, but possibly also that those who did
see the survey may have been reluctant to enter this data online. Whatever the combination of factors, only three
coherent responses were received.
One response from urban Damascus reported receipt of money at a registered money transfer company, the sender
paying a 10% fee for money to arrive reliably in one day. The person reported that the system was not suitable for PwD
due to lack of facilities or for women due to overcrowding and the time taken to be served.
A person in opposition-held (or frontline) Mahila in Rural Damascus received money through a family connection at a 15%
cost to the sender. As the money was received at home there was no need to pass dangerous areas.
Finally, money was reported received through a formal transfer company in urban Lattakia. Unspecified fees were paid by
both sender and receiver, the transfer took 3 days and the receiver travelled 3km to get to the agent’s office. The service
was reported as having been operating ‘almost always’ in the last 6 months.
Project Design Recommendations
Various forms of IVTS are used to deliver remittances inside Syria, to the almost complete exclusion of the formal banking
system. This seems to be based not on perception of cost or slow service, but may be related to privacy concerns and
convenience of service. Regulatory issues related to the various groups’ areas of control determine which options are
available to people in the first place.
Family connections may be used when receivers have the social capital to enable a transfer, and are more often used in
some isolated or contested locations (such as the south-east corner of Dar’a and Yarmouk Palestinian camp in
Damascus). Couriers are used when other options are limited.
Humanitarian agencies may be interested in the use of hawala, registered, unregistered or a combination of the two.
These ‘channels’ require different considerations
From registered hawala outside Syria to registered hawala inside Syria
• Registered hawala seem to operate in the main government-controlled towns, and in at least one case in YPG
controlled areas. NGOs are using them, although not much for CTP
• Data about transactions, including personally identifying information, is likely to be available to regulatory
structures in Damascus
• Agencies will have to consider the profile of their beneficiaries to decide if this is likely to place them at increased
risk
• Agencies can decide if a data privacy clause in a contract is a sufficient and meaningful measure – a
conversation with the donor may be wise
• Documentation on receipt of transfers is available from some operators
24
From registered hawala outside Syria to unregistered hawala inside Syria
• Unregistered hawala may offer the only scalable cash-out facility in areas outside government control. This
channel is not known to have been used yet for CTP in Syria.
• Documentary evidence of receipt of transactions is unlikely to be possible. Confirmation comes by phone or
• Finance SOPs would have to be revised to accommodate alternative confirmation
• Consultation with the donor is highly recommended
From unregistered hawala outside Syria to either type of hawala inside Syria
• This is not advised. If the perceived advantage is to obscure transactions from a host government, then the
project may need to be reconsidered.
For all hawala channels
• Due diligence checks will be required according to donor requirements and legal advice
• List checks will need to be made on both the sending and the receiving hawala. These checks should be on both
the documented owners and the beneficial owners – the individuals who are locally known to be behind a hawala
business
• Agencies should document checking that prospective hawala partners, both senders and receivers, have
appropriate internal processes
• An operating manual for staff
• Regular training for staff on the manual contents
• Record-keeping to support the equivalent of Know Your Customer requirements
• Agencies should consider from where hawaladars in Syria get their cash-out liquidity. This information will
probably not be available. A conversation with the donor is recommended
• There is no evidence of significant access differences between the modalities for various groups
• Women may face difficulties collecting money from a public place. Alternatively, women may be better able than
men to cross checkpoints and other dangerous places
• Minors may face administrative issues collecting payments - they may not have the required ID or status
• Elderly and disabled people may need alternate collector schemes if they cannot access payment points.
Alternatively, some hawaladars may offer home delivery
• Anyone who is particularly low status may be at increased risk of having their payment withheld, as their loss may
not imply loss of trust in a hawaladars by their peers. This point is largely theoretical, based on the nature of
hawala guarantees, and not backed by much data
25
For all possible delivery modalities, CTP using IVTS must sit within the full standard project design process (needs
assessment, risk assessment, equality and access considerations, donor compliance etc.). The risk of diversion, among
other risks, may be mitigated substantially by rigorous application of standard and extended internal processes. The
environment dictates however that there is likely always to be a significant residual risk requiring full consideration,
consultation and signoff.
A process of review and adaptation of agencies’ existing processes is likely to be required for CTP into Syria. The time
and buy-in required for this process should not be under-estimated, and there are considerable compliance risks if it is
attempted retroactively.
26
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